Surprise medical bills have long plagued healthcare consumers. A survey from AIC’s Center for Insurance Policy and Research revealed that unexpected medical bills concern more than 60% of consumers. Consider the patient who has surgery at an in-network hospital only to find out later that their anesthesiologist is out-of-network (OON). Or the patient who sees their primary care physician of 10 years only to later find out the doctor recently decided to participate with all major health plans—except their specific plan. The result? An unexpected medical bill.
The good news? The No Surprises Act(NSA) aims to change this. Under this law, patients are now protected from surprise or “balance billing.” And while this legislation is favorable to patients, the rules remain murky and challenging for providers. This post breaks down the No Surprises Act, how it affects healthcare practices, and solutions that may reduce some of the burdens this law imposes on physicians and their staff.
Breaking Down the No Surprises Act
The Kaiser Family Foundation estimates that about 67% of workers receiving employer health insurance are covered under a self-funded health insurance plan. These plans are governed under federal law and are exempt from most state insurance laws. However, the NSA covers consumers with employer-based insurance and individual market health plans from receiving surprise medical bills. So what does this new federal law do for consumers?
In short, the NSA removes consumers from payment disputes between a provider or healthcare facility and their health plan. The act requires healthcare providers to give patients a simplified notice explaining that out-of-network care could be more expensive. Additionally, according to Revcycle Intelligence, the law protects patients from surprise bills, particularly those that may result from OON services, including:
- Emergency services—patients can’t be charged more than in-network cost-sharing (e.g. co-pay) for these services. And any cost-sharing a patient pays counts towards their deductible and maximum out-of-pocket limits for the policy year.
- OON air ambulance services—studies show air ambulance balance bills can range from $10,000 to over $20,000.
- Items and services provided by OON providers at in-network facilities.
If a provider does not abide by these new rules, they can face a penalty of up to $10,000 for each violation. However, these protections only apply in some situations, not all, including:
- If patients have a vision or dental-only plan, these new protections generally don’t apply to services these plans cover.
- Ground ambulance services.
- The new law doesn’t apply to federally funded programs such as Medicare, Medicaid, Indian Health Services, TRICARE, or Veterans Affairs Health Care.
So what does this law mean for providers? Under this act, OON healthcare providers cannot bill patients for an amount more than the patient’s in-network cost-sharing obligation. Instead, OON providers must negotiate with the patient’s insurer to collect service payments. However, this change is also causing major shifts in practice management nationwide.
The NSA & Challenges to Providers
Dr. Andrea Brault, President and CEO of Brault Practice Solutions, tells Revcycle Intelligence,“Payer behavior changed once the law took effect, and many payers lost interest in retaining in-network status. Some walked away from active in-network negotiations, while others sent cancelation letters to their in-network providers.”
How are these actions impacting the healthcare system? A massive wave of OON payment disputes are being submitted for independent dispute resolution (IDR).
IDR & Delayed Cases
After the NSA ruling, the expectation was that payers and providers would settle payment conflicts before ever reaching an independent dispute resolution, or they would decide on more in-network agreements. Despite the positive expectations, these outcomes are scarce.
Revcycle Intelligence reveals, “Less than 18,000 cases were initially estimated for IDR in the first year of the NSA. However, data shows that more than 90,000 disputes have been submitted since the IDR portal began, with more than half needing IDR. And only 3,500 payment determinations were made in that period.” These issues are causing a growing backlog of delayed cases.
The Interim Final Rule
According to providers, the NSA also creates rules inconsistent with the law’s intent. Dr. Brault explains to Revcycle Intelligence, “Payers were initially emboldened by favorable language in the NSA’s interim final rule.” The interim final rule(IFR) states that arbitrators in the IDR process were mandated to consider that the qualifying payment amount (QPA) set by the payer was the suitable OON rate.
“By making the QPA the presumed amount for determining final payment, regulators were effectively changing the law, but the QPA was never meant as a tool to set rates,” states Dr. Brault.
Providers opposed the IFR, citing that it could lead to biased decisions by favoring payment offers closest to the QPA rather than allowing arbitrators to consider all pertinent factors as stated in the law. However, despite these challenges and barriers, some good news is on the horizon for providers.
The Final Rule & The Good Faith Estimate
The No Surprises Act enacted the final rule, addressing some concerns related to the initial interim rules, such as the IDR approach and the role of the QPA in deciding the final payment. For instance, the law removed the requirement of the QPA as the appropriate OON rate. As a result, IDR arbitrators now consider other factors in their determination, but only if they haven’t already been figured into the QPA, e.g., no “double counting.” Some providers still argue that this language shift is problematic because they must interpret how each payer calculates their QPA. Despite concerns, many agree that changes to the final rule are the right step in the direction.
Another positive outcome of the NSA is that most facilities and practitioners must give patients a good faith estimate(GFE) of all costs applicable to the non-emergency service they need. More specifically, the GFE should include expected charges for the primary service a patient receives and any other items provided as part of the same scheduled experience. For example, if a patient needs surgery, the GFE should contain surgery costs, lab services or tests, and anesthesia. However, some services related to the surgery, like pre-op appointments or physical therapy, might be excluded from the estimate.
Patients welcome the GFE, but it poses challenges for providers. For instance, the No Surprises Act requires healthcare facilities and providers to exchange billing information and codes with all co-facilities and co-providers. Unfortunately, no system currently allows unaffiliated providers to share information with affiliated providers. In other words, a doctor who treats patients in an in-network hospital cannot provide the facility with a GFE for treatment; they can only bill after. Doctor’s offices are also wondering how to even begin developing this document and how to craft a compliant GFE tailored to their needs.
Luckily, there is help for providers.
Moving the Needle Forward
DrChrono is determined to remove the administrative burdens draining time, energy, and enthusiasm from how providers work today. This philosophy also applies to legislative changes, like the NSA, affecting providers. With this understanding, DrChrono is now adding a Good Faith Estimate tool to help alleviate the additional burden on physicians and their staff.
We have built a tool where providers can easily equip patients with a Good Faith Estimate using patient and eligibility information. This estimate can be sent electronically or printed for the patient. Using this tool can help providers and their staff navigate GFE challenges and implement workflows with compliance in mind.
Changes in healthcare are inevitable, but having the right tools to manage these shifts can make all the difference in meeting these challenges and moving practices and healthcare facilities forward.